Catholic principles at heart of latest Franklin Templeton ETF launch

Franklin Templeton has launched its Catholic Principles Emerging Markets Sovereign Debt Ucits ETF within its Franklin LibertyShares range, which it calls the first of its kind in the European market.

According to the firm, the launch brings the number of article 8 and 9 EU SFDR-compliant strategies in its range to seven.

This new Article 8 Smart Beta ETF is based on the ICE BofA Diversified Emerging Markets External Debt Sovereign Bond Index and invests in euro- and US dollar-denominated sovereign debt issued by emerging market countries.

It excludes bonds issued by countries that score poorly on the following criteria identified by the index provider as Roman Catholic principles: governments’ moral integrity, social justice, abolition of the death penalty and care for the planet based on environmental, social, governance ratings data. The new ETF additionally adjusts its security weightings to reduce its overall carbon footprint relative to the Index.

Caroline Baron, head of ETF business development for Emea, at Franklin Templeton, said: “We are delighted to introduce this new Sustainable Sovereign Debt ETF at the lowest fee to European investors. With this offering we have created a custom-made index and partnered with an ethical advisor to ensure clients have access to a distinct ETF backed by the scale and resources of Franklin Templeton.

“The combination of Catholic values-based exclusions and a screening process for decarbonisation opportunities from the ETF’s investable universe should subsequently appeal to a broad range of investors seeking to widen their portfolio of sustainable investments.”

The Franklin Catholic Principles Emerging Markets Sovereign Debt Ucits ETF4 listed on the Deutsche Börse Xetra earlier this week, on the Borsa Italiana on 30 June and joins the London Stock Exchange (LSE) on 1 July. The ETF will be registered in the UK, Austria, France, Germany, Ireland, Italy, Spain and the Nordics.

Not entirely related news, but this follows the Vatican setting up its own committee to oversee ethical investment. As reported on these pages on 9 June, Cardinal Kevin Joseph Farrell, prefect of the Dicastery for the Laity, Family, and Life, will preside over the committee. He will be joined by Jean Pierre Casey, founder and CEO of RegHedge; Giovanni Christian Michael Gay, managing director of Union Investment; David Harris, portfolio manager of Skagen Funds; and John Zona, CIO of Boston College.

That news came at the time that Reuters reported that, as the committee was being constituted, the Vatican finds itself mired in a corruption trial relating to London real estate in which it has reportedly lost more than €200m.

Pete Carvill

Pete Carvill is a reporter, writer, and editor based in Berlin who has been writing for the B2B and mainstream media since 2007. He is a contributing writer for Expert Investor and, in addition, has...

Part of the Mark Allen Group.